quora

FCA Raises Major Concerns about Investing in Non-Fungible Tokens (NFTs)

n-img-fca

The FCA highlighted the significant risk associated with the Non-Fungible Tokens (NFTS) which may not be regulated beyond AML laws with an aim to ensure Britain’s safety.

With criminals becoming smarter in exploiting newer technologies, The Financial Conduct Authority (FCA) has issued a warning emphasising the high risks involved with dealing with investors’ money linked to the crypto assets investments by indicating that Non-Fungible Tokens (NFTS) may lead to speculative trading, money laundering and illegal financing.

As the NFT market is progressing at a high rate as expected to reach $40 billion at the end of the year, major considerations have been raised regarding its non-compliance with Anti-Money Laundering (AML) regulations causing consumer safety to be at a halt. In accordance with this, China and Hong Kong both have warned about the financial risks linked with NFTs and the metaverse in the past month. 

Furthermore, Britons were cautioned to not fall to scams used by digital crooks in prompting investments by utilizing fake celebrity endorsements depicted massively through social media posts. Exploiting major websites have been indicated as a major reason behind this as per the City Regulator as dupes were more likely to be reliant on Facebook or Twitter for investment tips. 

Additional concerns were also raised by FCA on matters of consumer protection, price volatility, product intricacy, charges and expenses, and trade materials. NFT investors are further notified about the prohibition of accessing the Financial Ombudsman Service or the Financial Services Compensation Scheme if any disruption occurs. 

A registration scheme for crypto-asset firms was kicked off by FCA while initiating a one-year deadline in January 2021, at the time in which the City watchdog was designated as the official anti-money laundering and terrorist financing supervisor for these corresponding firms. 

Meanwhile, the UK government is implying plans to put restrictions on crypto advertising through tough rules. The Exchequer is proposing to bring the attention towards crypto promotions into the scope of FCA’s existing oversight, rather than creating a framework, especially for these products. Providing the FCA with the power to regulate the promotion of various crypto assets would be the first and quickest way for stamping out misleading advertising. 

Suggested Reading: FCA Unveils Three-Year Anti-Money Laundering Strategy to Curb Financial Crime

Related Posts

News

United States Senate, UAE Government, and Spain Make Significant Efforts to Curb Money Laundering and Terrorist Financing Activities

UK Parliament Legislates New Digital Identity Verification Services Bill Taiwan and Singapore St...

United States Senate, UAE Government, and Spain Make Significant Efforts to Curb Money Laundering and Terrorist Financing Activities Read More

News

UK Parliament Legislates New Digital Identity Verification Services Bill

At the same time, trade bodies and digital identity service providers have consulted with the gov...

UK Parliament Legislates New Digital Identity Verification Services Bill Read More

News

Taiwan and Singapore Strengthen AML Regulations for Virtual Asset Providers and Banks

According to the recently passed amendments, overseas crypto platforms are obliged to set up loca...

Taiwan and Singapore Strengthen AML Regulations for Virtual Asset Providers and Banks Read More

News

Singapore and Europe Enhance AML Framework to Fight Financial Crimes Effectively

For the CSPs, the law mandates that they must ensure that the arranged nominees are “fit and prop...

Singapore and Europe Enhance AML Framework to Fight Financial Crimes Effectively Read More

News

Türkiye Removed From Gray List, India Recognized for Its AML Efforts, and Kuwait Urged to Have Better Money Laundering Control Measures: FATF Updates

In addition to these shortcomings, the watchdog discovered that the country’s banking, constructi...

Türkiye Removed From Gray List, India Recognized for Its AML Efforts, and Kuwait Urged to Have Better Money Laundering Control Measures: FATF Updates Read More

News

FINMA, SFC, and MAS Fine Multiple Financial Institutions Over $1.5 Billion For Money Laundering Activities

These suspicious transactions amounted to more than $300 million and were conducted between 2002 ...

FINMA, SFC, and MAS Fine Multiple Financial Institutions Over $1.5 Billion For Money Laundering Activities Read More

News

Nigeria, Myanmar, and Türkiye Take Effective Steps to Meet FATF Recommendations

Mohammad Shahid Ahmed, the Chief of Staff at NFIU, has been appointed as the Vice Chairman of the...

Nigeria, Myanmar, and  Türkiye Take Effective Steps to Meet FATF Recommendations Read More

News

Regulatory Authorities Fines TD Bank, Adelaide Casino, and SBI over $500 Million For AML Failings

In addition to this, the spokesperson also stated that the company failed to comply with due dili...

Regulatory Authorities Fines TD Bank, Adelaide Casino, and SBI over $500 Million For AML Failings Read More

News

United States Senate, UAE Government, and Spain Make Significant Efforts to Curb Money Laundering and Terrorist Financing Activities

UK Parliament Legislates New Digital Identity Verification Services Bill Taiwan and Singapore St...

United States Senate, UAE Government, and Spain Make Significant Efforts to Curb Money Laundering and Terrorist Financing Activities Read More

News

UK Parliament Legislates New Digital Identity Verification Services Bill

At the same time, trade bodies and digital identity service providers have consulted with the gov...

UK Parliament Legislates New Digital Identity Verification Services Bill Read More

News

Taiwan and Singapore Strengthen AML Regulations for Virtual Asset Providers and Banks

According to the recently passed amendments, overseas crypto platforms are obliged to set up loca...

Taiwan and Singapore Strengthen AML Regulations for Virtual Asset Providers and Banks Read More

News

Singapore and Europe Enhance AML Framework to Fight Financial Crimes Effectively

For the CSPs, the law mandates that they must ensure that the arranged nominees are “fit and prop...

Singapore and Europe Enhance AML Framework to Fight Financial Crimes Effectively Read More

News

Türkiye Removed From Gray List, India Recognized for Its AML Efforts, and Kuwait Urged to Have Better Money Laundering Control Measures: FATF Updates

In addition to these shortcomings, the watchdog discovered that the country’s banking, constructi...

Türkiye Removed From Gray List, India Recognized for Its AML Efforts, and Kuwait Urged to Have Better Money Laundering Control Measures: FATF Updates Read More

News

FINMA, SFC, and MAS Fine Multiple Financial Institutions Over $1.5 Billion For Money Laundering Activities

These suspicious transactions amounted to more than $300 million and were conducted between 2002 ...

FINMA, SFC, and MAS Fine Multiple Financial Institutions Over $1.5 Billion For Money Laundering Activities Read More

News

Nigeria, Myanmar, and Türkiye Take Effective Steps to Meet FATF Recommendations

Mohammad Shahid Ahmed, the Chief of Staff at NFIU, has been appointed as the Vice Chairman of the...

Nigeria, Myanmar, and  Türkiye Take Effective Steps to Meet FATF Recommendations Read More

News

Regulatory Authorities Fines TD Bank, Adelaide Casino, and SBI over $500 Million For AML Failings

In addition to this, the spokesperson also stated that the company failed to comply with due dili...

Regulatory Authorities Fines TD Bank, Adelaide Casino, and SBI over $500 Million For AML Failings Read More

Take the next steps to better security.

Contact us

Get in touch with our experts. We'll help you find the perfect solution for your compliance and security needs.

Contact us

Request demo

Get free access to our platform and try our products today.

Get started